SPORTS GAMBLING: it’s NOT just a fantasy…….
Sports gambling has become a huge hobby for most sports fan over the years whether it be at the horse track, on who will win the Super Bowl or during March Madness. Gambling is a risky hobby in general, but sports gambling has been extremely risky since it has been illegal in all states expect Nevada until Monday morning. As most of you have heard the Supreme Court lifted the federal ban on sports gambling. This may seem like a huge victory for most, but Uncle Sam is rejoicing as well.
Even though the federal ban has been lifted I wouldn’t get carried away just yet. It is up to each states Legislature to create its own gambling laws and restrictions. I wouldn’t bet on Texas being one of the first to jump on the betting bandwagon though. In 2016, Texas Lt. Gov Dan Patrick won a longstanding battle when the Texas Racing Commission agreed to take a rule off the books that would’ve allowed historical racing terminals at tracks across the state.
Here is how sports gambling will impact your taxes in 2018.
Any winnings from sports gambling, whether its fantasy football leagues or a square lotto, the IRS will consider this income. If you win at least 300 times and/or the payout is $600 or more, the facility will ask for your social security number to send a form to the internal revenue service.
Now the IRS isn’t just targeting “Sports” gambling. The IRS has gambling laws/rules in place for a long time now. If you go to the casino and win $1,200.00 on the slot machine you are subject to report these winnings as well. Now unless you invite a federal agent to poker night in the garage the government isn’t going to come after those winnings.
Enough with the mumbo-jumbo, how is this going to impact your taxes. Well when tax season rolls around you will receive a Form W-2G showing the amount you won and the taxes withheld. (The gambling institution is required to withhold 24% of your winnings as federal withholding tax.) Before the new tax laws of 2018 you could deduct your gambling losses up to your gambling winnings on your Schedule A. With the new tax law basically doubling the standard deduction in 2018 it’s going to be pretty impossible for most people to file a Schedule A.
|Filing Status||2017 Standard Deduction||2018 Standard Deduction|
|Married Filing Joint||$12,700||$24,000|
|Married Filing Separate||$6,350||$12,000|
|Head of Household||$9,350||$18,000|
Along with all other deductions you need to keep records of not only your winnings, but your losses. If you are able to itemize in 2018 you will need to have records of the losses you’re claiming.